Federal Legislative Update: What the Corporate Transparency Act Means for Community Associations
Community associations across the country have been closely monitoring recent federal legislation that could significantly impact how associations—and more specifically, volunteer board members—handle personal information reporting requirements.
At the center of this discussion is the Corporate Transparency Act (CTA), a federal law enacted as part of broader anti-money laundering efforts. The CTA requires certain entities to report “beneficial ownership information” (BOI) to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury. This information can include personal identifying details of individuals who exercise substantial control over an entity—such as members of a community association’s board of directors.
Why This Matters for Community Associations
While the intent of the CTA is to prevent financial crimes such as fraud and money laundering, its application to community associations has raised concerns across the industry. Volunteer board members—who are often neighbors serving their communities without compensation—may be required to submit sensitive personal information to a federal database.
Industry leaders, including Community Associations Institute (CAI), have expressed concern that these requirements create an unnecessary burden on volunteer leaders and could discourage homeowner participation in governance. Additionally, questions have been raised about data privacy, security, and the long-term handling of this information.
Legislative Update: H.R. 425
In response to these concerns, federal lawmakers have introduced H.R. 425, a bill that proposes a full repeal of the Corporate Transparency Act.
The bill recently advanced through the House Financial Services Committee with an important amendment. If enacted, the legislation would not only repeal the CTA but also require FinCEN to delete certain beneficial ownership data previously collected from individuals and entities that would no longer be subject to reporting requirements.
H.R. 425 is now moving forward to the U.S. House of Representatives for consideration.
What This Means Moving Forward
At this time, the Corporate Transparency Act remains in effect, and associations should continue to stay informed about their potential obligations. However, the advancement of H.R. 425 signals that lawmakers are actively reviewing the law’s impact—particularly as it relates to community associations and volunteer governance.
We encourage board members and homeowners to stay engaged and informed as this legislation progresses. Changes at the federal level could directly affect compliance requirements, reporting responsibilities, and privacy considerations for associations nationwide.
Staying Informed
Blackstone Management will continue to monitor this legislation closely and provide updates as new information becomes available. Our goal is to ensure that the communities we serve remain informed, prepared, and compliant with all applicable regulations—while also advocating for practical, common-sense policies that support volunteer leadership.
